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SMIC will spend $7.5 billion on a new factory in Tianjin.

Shanghai: Semiconductor Manufacturing International Corp (SMIC), a Chinese chip foundry, said it had signed an agreement to invest $7.5 billion in a new 12-inch foundry production line in Tianjin.

The plans are part of the company’s ongoing plan to grow. The company, which is based in Shanghai, is under U.S. sanctions because it has ties to China’s military, which it denies. It is a very important part of China’s plan to grow its own chip industry.

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A filing from Friday night says that the new fab will be able to make 100,000 12-inch wafers per month for process nodes between 28 nanometers and 180 nanometers.

The filing said that the plant will be run as a subsidiary of SMIC with the help of the government of Tianjin’s Xiqing district. The initial registered capital for the plant will be $5 billion.

The company did not say when production would start at the plant.

SMIC is the biggest chip maker in China. It gets some of its money from the government. Even though it mostly sells chips to customers around the world, it isn’t as good at technology or has as big a market share as Taiwan Semiconductor Manufacturing Co.

As Washington and Beijing compete over access to and development of chip technology, the company has been building up its capacity.

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SMIC said it would build a 12-inch fab in Beijing by the end of 2020. Then, in 2017, it said it would build new fabs in Shenzhen and Shanghai.

The Tianjin fab will be the company’s fourth in China. It will join three 8-inch fabs and three 12-inch fabs that are already running in the country.

Late in the year 2020, Washington put sanctions on SMIC that prevented the company from using certain manufacturing equipment. This means that the company can’t make chips that use 7-nanometer process nodes.

Sanctions are meant to stop SMIC from making high-tech chips that meet industry standards, but some analysts have found signs that SMIC has made 7-nanometer chips anyway.

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